Commentary on Political Economy

Friday, 1 December 2017

Chronicles of A Crisis Foretold - 3

Time is money. The vital formal characteristic of capitalism is the maximisation of profit. But profit is, first, a monetary expression; and second, profit is a rate in the sense that there can be no meaningful expression of profit in static terms: profit is always and everywhere a rate, in the sense that profit can only be expressed and understood as “profitability”, that is, as the rate of profit over the amount of capital invested. It follows that capital itself can never be a static, quantifiable entity - because capital can be understood only in relation to profit. Capital can never stand still: it is always and incessantly in circulation because its essence is a social reality that projects the present into the future. In the words of JM Keynes (General Theory), “money [capital] is a bridge between the present and the future”.

But what does capital “bridge” exactly? Capital is a social relation. Its rate of increase, its yield or profitability is a measure of its ability to control the living activity of human beings - workers - in terms of the money wages paid to them. Capital is therefore a wager by the capitalist, the employer, that he will be able to employ workers to produce commodities that the employer will be able to sell for a money profit that will enable him to employ more workers at the same money wage. In other words, capital is the use of the monetary medium to produce commodities by means of the worker’s living activity so as to be able to purchase the living activity of more workers when these commodities are sold to the existing labour force. All production ultimately resolves itself into the cost of means of production and money wages. But means of production are themselves produced by workers. Therefore, all production is ultimately the product of the living activity of workers. Workers are forced to alienate their living activity in exchange for the dead labour embodied in the commodities they produce! It s evident that the exchange of living labour for dead labour is really no exchange at all and can only take place through violence either blatant or disguised, immediate or latent.

It is the chief characteristic of capitalism to be the civilisation of forced labour whereby human living activity is turned into a quantity measured by the discipline of the factory or workplace and of the market. The discipline of the factory is enforced by the capitalist; that of the market is enforced by the consumer, which can be both a capitalist and a worker. It is evident that these two forms of discipline - one imposed on the worker, the other on the capitalist as a seller of dead labour embodied in commodities - rely entirely on an expanding reserve army of workers (relative overpopulation) to ensure that workers compete for employment, and on competition amongst capitalists for both workers and for means of production as well as for consumers.

It follows from this analysis that although the immediate motivation of the capitalist is that of maximising profit, the mediate or indirect effect of the capitalist search for profit is the expansion of the working population, either actively employed or as a reserve army of the unemployed. Again, this is so because the essence of profit is politico-economic control over living labor. Thus, the search for profit transforms itself in reality in the rapid expansion of the working population, and therefore in relative overpopulation. Overpopulation is relative in the sense that it is not an absolute number. But it is overpopulation in the sense that the number of potential workers is greater than the active employment required by capitalist employers; and also, most important, in the sense that this population consumes resources in excess of what can be produced sustainably because the competition amongst the population of workers for work and money wages and ultimately for consumption goods is “competitive” because the resources available are “scarce”! Herein lies the link between capitalism and the destruction of the ecosphere. Capitalism must ensure the reproduction of the wage relation so that “free workers” are forced to alienate their living activity in a false “exchange” with the dead labour embodied in the commodities they themselves produce. But for this “free” labour force to be “forced” into alienated wage labour, the number of workers available must exceed the amount of resources, social and natural, available for a socially acceptable standard of living. That is why the population required by capitalist industry is always and everywhere “in excess” of what the environment can sustain.

In other words, capitalist industry necessarily engenders the destruction of the ecosphere. The consequent scramble for social and environmental resources (minerals, land, water, and now finally even fresh air!) leads to geopolitical tensions that we now see coming to an apocalyptic crescendo. It is important to note that even the “democratic” Western bourgeoisie has always relied on the survival of brutal dictatorial and autocratic powers from Russia to China to Angola and Congo so long as they made their excess populations available for exploitation by capitalist industry. It is essential to remember in this context that “the Great Moderation” in Western capitalist industrial and financial conditions over the last 30 years coincided with the doubling of the global labour force brought about in large part by China and India and by the growth of the global population by 35 per cent in 25 years!